SJP and finding a better alternative

martinporter69

Hi there,
I have read quite a long thread on SJP and it seems to align with a few alarm bells in my head!
I inherited some stocks and shares unit trusts around 10 years ago from late father. They are in SJP and still are. The advisor has quite rightly pointed out that the only ISA I have is sitting in a bank account a measly 0.1% rate and thus devaluing (it's around £50K). They want me to move the ISA into SJP as a tax wrapper so it can earn money and save tax on the ISA part. All far, so good..

But I get the feeling that the growth is low with SJP - about 6% last year, their input charges are high (5%) and the annual fees are high as well? relatively anyway
I want to do better and need to look at where I should put my money for the next 5 to 10 years (I'm 50). I have a medium appetite to risk, but perhaps should think about maybe putting part of the £50K into a higher risk/reward investment.

Any pointers, please?

Albermarle

I want to do better and need to look at where I should put my money for the next 5 to 10 years (I'm 50). I have a medium appetite to risk, but perhaps should think about maybe putting part of the £50K into a higher risk/reward investment.

Normally this would be a good idea , although 10 years would be better than 5 . A couple of questions though:

If you have a medium attitude to risk and thinking about investing , why now ? why have you left £50K in a very low interest rate savings account ?

What is your pension situation, often it is better to invest in your pension due to the tax benefits but it depends what sort of pension you have ?

El_Torro

I know someone who has significant investments with SJP. The criticisms are true: SJP have high charges and their funds don't necessarily perform that well. 

You can certainly move your £50k in a Cash ISA to a Stocks & Shares ISA, over the long term getting a much better return. If you are aware of the downsides of SJP and you are happy to keep using them then investing your ISA with them is not a bad way to go. 

Perhaps a better way to go is find an IFA who can invest both your ISA and the investments you have with SJP. You'll most likely find that the charges are a lot more competitive than SJP and the fund choice is a lot wider. 

You could even take the matter into your own hands and invest yourself, go DIY as they say. If you're not comfortable doing this then you will need to either do some research to become confident in DIY investing or accept the fact that you're going to be using an IFA. Charges are well spent if they stop you investing incorrectly and potentially ending up with less money than you started with.

barnstar2077

From what others have said on this forum I think you may well still have higher charges from an IFA than you would find ideal, because of the 50k pot size of your ISA.  You may want to consider opening an S&S ISA yourself and investing in a global fund or two.  I am with Vanguard personally, and I invest in one of their Lifestrategy funds.  It isn't the best solution, but it is one of the cheapest and easiest.  If you can spare some time to do a bit of reading up and investigating you may be surprised how easy it all is really.  Please avoid SJP like the plague though whatever you decide to do. 

Dazed_and_C0nfused

The advisor has quite rightly pointed out that the only ISA I have is sitting in a bank account a measly 0.1% rate and thus devaluing (it's around £50K). They want me to move the ISA into SJP as a tax wrapper so it can earn money and save tax on the ISA part. All far, so good..

Not sure how you can save tax when it is already in a tax exempt account in the first place?

TBC15

SJP there is a thread on how good they are for the investor just use the search function.

Edit my bad no such thread has ever existed.

martinporter69

Albermarle said:

I want to do better and need to look at where I should put my money for the next 5 to 10 years (I'm 50). I have a medium appetite to risk, but perhaps should think about maybe putting part of the £50K into a higher risk/reward investment.

Normally this would be a good idea , although 10 years would be better than 5 . A couple of questions though:

If you have a medium attitude to risk and thinking about investing , why now ? why have you left £50K in a very low interest rate savings account ?

What is your pension situation, often it is better to invest in your pension due to the tax benefits but it depends what sort of pension you have ?

Pure ignorance and laziness to an extent. A recent review (with the SJP) person pointed out the folly of leaving money in a ISA account (YBS) that's earring next to nothing. So although late to the game, I need to start thinking of the best plan for me

I invest in my pension via my limited company that I am sole director off. So I get the government top up and lower the corporation tax as well. That seems the best way to pay for a pension/take money out of the company and lower the corp tax?. 
I only have £100K pension fund, so I am in the process of moving 20K into this and upping my monthly payments (or the company's to be exact)
Pension is with Aviva, but managed by SJP

martinporter69

barnstar2077 said:

From what others have said on this forum I think you may well still have higher charges from an IFA than you would find ideal, because of the 50k pot size of your ISA.  You may want to consider opening an S&S ISA yourself and investing in a global fund or two.  I am with Vanguard personally, and I invest in one of their Lifestrategy funds.  It isn't the best solution, but it is one of the cheapest and easiest.  If you can spare some time to do a bit of reading up and investigating you may be surprised how easy it all is really.  Please avoid SJP like the plague though whatever you decide to do. 

I have seen that you can use a platform to invest myself in funds. When you see headline figures like 60% growth (Ballie Gifford Gold something) per year and even 5y of 324% (from memory) then it does make you think.

Now I appreciate that the headline figures are for a high risk fund (I believe) but there has to be some way I can invest in a less risk/long term/lower return fund or funds?
When I emailed the SJP guy that I was having 2nd thoughts about moving the ISA into SJP, he was on the phone within minutes..
And then pointed out the folly of the fund based in gold for example..
So, I am happy to DIY it, but it would need to be a solution I don't mange daily due to time pressures.?
I'm wary of IFAs purely because I know one or 2 and they are always skint! 

NottinghamKnight

The IFAs may be skint because they aren't taking massive amounts of money from their clients as SJP do, that £80k German car is being paid for by someone, probably you.  One question for your SJP man might be why are they using Aviva funds, the whole point of SJP is that they are vertically integrated, so they have the secret sauce to add in their own funds (there isn't any, their funds are below average performers, mainly because of the excess charges).
The basics of investing aren't difficult and has arguably become easier over recent times. You can purchase the same funds in a pension, isa or gia (unwrapped account). Multi asset funds are available from all of the large providers such as vanguard, fidelity, hsbc, blackrock etc and you can do some simple online tests to determine your risk acceptability level. These funds won't typically be up huge amounts, certainly in the short term, but track the market and give you steady returns over the years, total fees can be less than 0.5% with no initial charges. The higher the equity (share) percentage then generally the higher the return but the more volatility, ie a rougher ride getting there. There's no day to day management, you just need to review a couple of times a year and with the funds mentioned they auto rebalance so you don't even need to adjust your allocations. Have a read of the monevator website, look back through these boards and maybe buy or borrow a couple of books on investments, it's likely to save you tens of thousands compared with SJP.

dunstonh

I'm wary of IFAs purely because I know one or 2 and they are always skint! 

I know dozens and the only ones that dont earn much are the employee ones that take lower pay in return for security or new starters.   FAs tend to earn less than IFAs. Although SJP FAs tend to be rolling in it as their charges are so high.

IFAs are required to be solvent and IFA firms are required to have excess capital of £20k minimum or 5% of their turnover, whichever is higher.

Albermarle

Now I appreciate that the headline figures are for a high risk fund (I believe) but there has to be some way I can invest in a less risk/long term/lower return fund or funds?

A typical retail investment platform , will offer thousands of different funds , shares etc . You can have high risk, low risk , actively managed , passive index trackers , etc etc,

Nottingham Knight explains it in more detail above .